The Federal Reserve gave Union Planters Corp., Memphis, permission to buy Franklin Financial Group, Morristown, Tenn.
The deal gives $11.3 billion-asset Union Planters control of 9.1% of all commercial bank deposits in Tennessee.
In approving the deal, the Fed rejected a Community Reinvestment Act protest filed by the Mid-South Peace and Justice Center, which has repeatedly challenged Union Planters' record of serving low-income minority communities.
The Fed said all of Union Planters' banks have received either outstanding or satisfactory CRA grades. Also, it said the agencies have found no evidence that the bank discriminates.